NACOF Seals Long-Term Supply Pact for Potash with Canada's Encanto
New Delhi, India: National Federation of Farmers' Procurement, Processing and Retailing Cooperatives of India Limited (NACOF) have announced that it has entered into a long-term agreement to obtain Muriate of Potash (MOP) from the Canada-based Encanto Potash Corp.

As per the contract, Encanto will supply minimum 5 million tonnes per year of MOP for a guaranteed period of twenty years to NACOF. Food security attained via procurement of an alternative supply of MOP and excluding middlemen for Indian farmers is an essential objective for NACOF.

Stavros Daskos, President, Encanto, stated, “This is evidently a significant moment for our company and the industry. India imports 100 per cent of its potash and is prone to cartel-like practices from producers that can hurt its national food security. Establishing long term offtake agreements are difficult and necessitate a great amount of time and understanding of a country's food security policies and how they interface with the dynamics of a supply environment controlled by a small n umber of entities ."

Factually, potash consumption in India had reached around 6 million tonnes in 2010-11, and their aim, as per the Ministries of Chemicals and Fertilizers, is to return to this level as potassium is required in large amounts to endure and grow their crop based industry. The relatively high retail cost of MOP and other potash-based fertilisers in India encouraged many farmers to support the use of fertilisers biased towards higher nitrogen content due to their lower cost.

NACOF and Encanto believe a protected and stable supply of MOP at rational prices will incentivise India's farmers to progress to a balanced fertilisation program where the growth rate in consumption of potash-based fertilisers will be higher than the growth rate of consumption of substitute fertilisers.

The Indian government has set an objective to double the farmer's income in the next five years, and continues its efforts to educate Indian farmers on the long term benefits and latent increases to crop yield that can be realised from a balanced and strategic fertilisation program. Soil health assessments being provided by the Indian government and constant marketing targeted at farmers will play a vital role to help prevent over-use and misuse of urea fertilisers